Start a business abroad
Cost of services
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What we offer
- Assistance with the choice of a country for the relocation of an existing business, based on the essence of the client's business, its goals, and needs, as well as the geography of clients;
- Development of a relocation strategy: analysis of legislation in terms of regulatory requirements that may be imposed on investors (minimum amount of investment in the company, licenses, etc.);
- Recommendations on the choice of legal structure for business relocation: establishment of the new company from the scratch (a subsidiary of the Ukrainian legal entity), setting up a branch office, registration of the permanent establishment;
- Planning of expenses for the maintenance of the business abroad (taking into account expenses on annual renewal of the company, office maintenance, salaries of the employees, etc.);
- Assistance in personnel relocation from Ukraine: selection of the most optimal form of labor relations (employment agreement vs. civil-law agreement), payroll tax calculation, assistance with the elaboration of employment (civil-law) agreements required by local legislation, advising on specifics of Director and Founder employment, assistance in obtaining a temporary residence permit, etc;
- Assistance in hiring local personnel;
- Calculation of tax losses and other expenses when hiring local employees and expats;
- Determining the amount of the company's assets to be transferred abroad (movable, immovable);
- Planning and support of the process of transfer of assets: selection of the most appropriate form of transferring assets on the balance sheet of the foreign company (sale-purchase, contribution to the authorized share capital, etc.), valuation of assets, removing of assets from the balance sheet of the Ukrainian company and placing assets on the balance sheet of the foreign company;
- Selection of bank/payment system, support of the process of opening an account for a new company (filling out bank forms, assistance with KYC procedures, assistance in substantiating the source of funds for the beneficiary, etc.);
- Transfer of counterparties to the new company, support for the renegotiation of business contracts with them;
- Transfer of the Ukrainian company in "sleeping mode" or support of liquidation of the Ukrainian legal entity;
- Structuring the receipt of profits from a foreign company by shareholders (business owners), taking into account applicable taxation.
Starting a business from scratch abroad:
- Assistance with the choice of the country for setting up a business abroad, based on the client's business model, goals, and needs;
- Advising on regulatory, corporate, licensing, and other requirements in a particular country (comparative characteristics of several most favorable countries);
- Planning the costs of maintaining a business abroad (taking into account the cost of registration and annual maintenance of the company, office maintenance, staff salaries, etc.);
- Assistance in finding and appointing a director; advising on the peculiarities of employment relations with the director (consider the difference in appointing a local director and an expat);
- Assistance with employment of Ukrainian employees in a foreign company: selection of the most optimal form of labor relations (employment contract vs. civil law contract), Calculating taxes on wages, assistance in the preparation of the employment (civil law) contract, given the requirements of local legislation, support for obtaining a residence permit, etc;
- Assistance with employment of local staff;
- Calculating tax losses and other expenses when employing local staff and expats;
- Assistance in finding office premises and support in drafting lease agreements;
- Obtaining permits (licenses);
- Communication with banks on fundraising;
- Consulting on the most optimal way and support in the process of company financing (contribution to the authorized capital vs. granting a loan); advantages and disadvantages of each option;
- Determination of the amount of the company's assets that need to be registered in the company (movable, immovable);
- Planning and support of the process of "stuffing" the company with assets: the conclusion of contracts for the purchase and sale of real estate (calculation of tax losses), shares, etc.;
- Selecting a bank/payment system, supporting the process of opening an account for a new legal entity (filling out bank forms, assistance with KYC procedures, assistance in substantiating the source of funds for the beneficiary, etc.);
- Supporting the business activities of the company, advising on the application of local legislation, elaboration/verification of contracts to be concluded for compliance with the requirements of local laws;
- Structuring of profits from a foreign company by its shareholders (business owners), taking into account applicable taxation.
The terms of registering a company abroad
The general term of company registration for Ukrainian individuals or legal entities in the EU and other countries is 1-2 weeks from the moment of gathering all the necessary documents.
How much does it cost to register a company abroad?
The cost of company registration abroad will depend on:
the number of founders and, therefore, the time we will spend on the process of collecting, and translating KYC documents and their subsequent provision / approval by the agents on site;
the format of company registration (remotely, by power of attorney, or in person at the notary, when visiting the country of incorporation);
the way of financing the company (e.g. equity contribution is more linear and understandable for the bank than financing through a loan, which will require prior verification of the lender, identification of the beneficiary and connected persons, verification of the transaction for compliance with the "market conditions" (arm's length basis), etc.);
the choice of the personality of the director (local / expat), the format of his leadership of the company (remotely / on-site) - depending on the chosen option document management (and our time costs) will be different (for example, the employment of an expat as the director must obtain a work permit, temporary residence permit, and therefore involves communication with the Employment Center, the Migration Service, the introduction of payroll accounting for the company);
the type of the charter (template or sophisticated, for example, containing certain restrictions on the delimitation of powers between the bodies of the company's board).
Service packages offers
- Analysis of the client's goals and business model to determine the criteria for choosing one or another jurisdiction for business relocation
- Providing an overview of the investment attractiveness of different countries and tax costs in a particular country, focusing on the wishes of the client
- We will consider the advantages and disadvantages of countries where it is possible not to pay taxes at all (a priori); where you can not pay taxes under certain conditions; and also where you can pay low tax rates (compared to Ukraine)
- Providing recommendations for the client regarding the optimal jurisdictions for business relocation
- taxation of company profits in a new jurisdiction, as well as filing financial statements (on income tax, VAT, etc.)
- ways of financing a foreign company
- “minimum economic presence” in the country of incorporation of the company
- taxation on repatriation of profits: tax on repatriation at the level of the jurisdiction paying income, etc.
- the need to declare the profits of foreign companies in Ukraine and pay tax on their profits in Ukraine (under the law on CFC), through the prism of the client's situation
- opening bank accounts (overview of applicable KYC procedures and difficulties that may arise in connection with the citizenship of the beneficiary, the source of funds, etc.)
- selection of the optimal jurisdiction for business relocation, taking into account the wishes of the client
- advising on taxation and other nuances for doing business in another jurisdiction
- assistance with company registration, tax registration, opening a bank account and bookkeeping (bookkeeping, payroll, VAT returns)
- assistance with the appointment of a director and the relocation/recruitment of employees
- execution of all necessary documents (including legalization of status in the EU, obtaining a residence permit with the right to work, etc.)
- assistance with finding and renting an office; negotiations with the landlord in order to secure the most favorable conditions for the client
- assistance with the development of business contracts in accordance with local legislation
- household planning transactions (for possible tax consequences, etc.).
- Determination of the purposes of opening an account abroad (to receive payments for services, to purchase real estate)
- Advising on the advantages and disadvantages of an account abroad, as well as the obligations that it imposes (whether it is necessary to declare in Ukraine, restrictions on actions with an account)
- Assistance with the choice of a foreign bank / payment system, if the client has already decided on the jurisdiction
- Preparation of a complete package of documents for client
- Assistance with the preparation of documents on the source of origin of funds of an individual, as well as with the “history” of the source of funds
- Translations, notarization and apostille of documents on an individual for a bank
- Filling out bank forms
- Communication with the bank
- Accompanying the client identification procedure at the bank (in the case of a video conference) or organizing a personal meeting with the banker, preparatory work before the meeting
- Help with choosing a bank
- Preliminary check of the beneficiary regarding his acceptability by banks (i.e. absence in the “grey” lists)
- Preparation of a package of documents for the company, beneficiary and account manager for the bank. For the company, we prepare a package of registration documents, a tax certificate on the tax residency of the company, documents confirming the existence of the company at the time of filing documents with the bank (certificate of incumbency, certificate of good standing). Verification of all company documents for compliance with the requirements of the bank in form and content
- Assistance with the formation of the history of the source of origin of funds by the beneficiary for the bank. Preparation, collection of relevant supporting documents (documents confirming ownership of real estate, movable property, shares, inheritance, documents from banks with account balances, etc.)
- Description of the business model of the company in such a way that it is acceptable to the bank. Development of a communication strategy with the bank and presentation of the client's planned business
- Filling out bank forms
- Preparation of the client for the interview (we discuss the list of questions in advance) and assistance with the identification of the client in the bank
- We are preparing a package of documents confirming the registration of Sole proprietorship as a business entity
- We prepare documents confirming the turnover of Sole proprietorship (its financial activity)
- We collect documents confirming the source of origin of Sole proprietorship (for confirmation before the bank from where the funds for the business were earned)
- We justify to the bank the expediency of opening such an account
- Filling out bank forms
- We accompany the identification procedure in the bank / interview with the banker
Choosing a foreign jurisdiction to relocate a business or register a company
What to consider when choosing a jurisdiction:
- available taxation systems for legal entities (profit tax rate, availability of simplified taxation systems, benefits for start-ups);
- requirements for the minimum investment in the authorized share capital of the company;
- applicable taxation in case of repatriation of profits (dividends);
- applicable taxation when choosing one or another form of company financing;
- taxation of income of individuals/employees (local and foreign personnel);
- the rate of the minimum wage of a natural person in a particular EU country;
- affordability (price) of the office rent;
- loyalty of the banking system;
- ease of communication and predictability of the tax authorities;
- the features of the customs clearance of goods, the peculiarities of the registration of the VAT payer and the procedure of reimbursement (depending on the route of the goods in the EU);
- company's maintenance costs (including office/land lease, maintenance of production facilities, if any, employee remuneration, bank fees, state duties, etc.).
Which countries in the EU / world have the best business taxes?
The answer to this question will largely depend on the specifics of your business, but the most common jurisdictions include:
- UAE (no taxes at all);
- Countries that do not charge tax on profits until they are taken out to the shareholder (Poland, Estonia, Latvia, Georgia);
- Hong Kong (territorial principle of taxation);
- Countries with low-income tax rates (Bulgaria, Hungary, Cyprus, Scotland, etc.).
Here are some examples.
Poland currently has two very interesting models of taxation:
- for "small businesses" and startups, which allows the application of a rate of 9% instead of 19%.
- model, which is a copy of the Estonian model of taxation and which allows not paying tax until the distribution of profits to the shareholder.
The UAE is attractive because there is no tax at all. That is, you can set up a company and it will not pay income tax in the UAE (regardless of the amount of profit). At the same time, the distribution of this profit to the shareholder will also be exempt from taxation. However, it is necessary to be careful with the choice of free zones, as depending on the scope of the company: only some free zones may suit you. In this case, the different free zones have their own requirements for the minimum authorized capital, the terms of its payment, the cost of the license, etc.
Estonia, Latvia, and Georgia are attractive due to the fact that if profits are not withdrawn to the shareholder, but are sent back to the business, companies registered in these countries have the opportunity not to pay tax on profits at all. Therefore, if you need a company that will be the so-called " wallet", that is, which will accumulate profits, which, in turn, will later be reinvested back into the business or spent on business needs, then these jurisdictions are a good option. Withdrawal of profit in favor of the shareholder should be carefully planned.
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Steps of company registration for Ukrainian persons abroad
The following steps of the procedure can be distinguished as standard:
- The KYC procedure, collection of documents confirming the source of funds;
- Verification of the company's name for availability, and reservation;
- Preparation of power of attorney from the founder (notarized and apostilled) in the case of remote company registration;
- Determination of the amount and method of financing the company, preparation of supporting documents for the bank (loan agreement, protocol on the company foundation, and contribution of money/property in the authorized capital);
- Development of constituent documents, coordination with the client;
- Development of the company's charter in accordance with the client's wishes;
- Submission of documents for registration of a company;
- Obtaining registration documents, apostilization;
- Registration of the company in the tax office;
- Opening a bank account (KYC on the beneficiary in the bank, coordination of the business model with the bank, filling out the bank forms, assistance in identifying the client in the bank, etc.);
- Transfer of money to the statutory fund or plant of money as a loan.
The stages may vary somewhat, depending on the jurisdiction and the specifics of the case - the entire algorithm at the start of the work is prescribed by the lawyer, who will later be responsible for registering a business for you abroad.
The client receives the final package of apostilled registration documents of the company, as well as the keys to the bank account.
Tax planning for the company in the EU or another jurisdiction
We all understand that the procedure of company registration in Poland, Croatia or Georgia, or any other jurisdiction, is only the very beginning. The main thing you need to understand, even before starting the incorporation procedures, is whether the taxation of your business in the given jurisdiction will be acceptable for you and how it may be optimized.
It is with tax planning we suggest you start the procedure of starting a business abroad. The planning will include:
- Choosing the taxation system of a legal entity (based on the profit tax rate, availability of simplified taxation systems, benefits for start-ups);
- Planning of profit repatriation, analysis of taxation in case of profit repatriation (dividends in favor of the shareholder), taking into account the applicable double taxation treaties;
- Analysis of the taxation when choosing a form of financing a company (contribution to the share capital or a loan from a third party);
- Analysis of individual/employee income taxation, minimum wage rates for individuals in a particular EU country.
As a result, the client will get a clear idea of the tax losses he will incur in case of company registration in a particular country, as well as the most optimal ways of profit withdrawal, based on the applicable law.
Answers to frequently asked questions
The most common option is distributing dividends. But they can be withdrawn infrequently and under certain conditions. Also when withdrawing dividends in the country of registration of the company it is necessary to pay a certain tax (repatriation tax) in Ukraine (9+1,5%).
It all depends on the chosen country (in different countries the amount of state fees and the procedure itself are different). For example, in the Baltic countries - 1,500-2,000 euros. In Cyprus - up to 3000 euros.
Business relocation to the EU and other jurisdictions from Ukraine
Registering a company from scratch and relocating a business ultimately involve the same thing - namely, shifting the center of business interests to another country. At the same time, there are usually some additional points to be taken into account for relocation:
- relocation of personnel from Ukraine and/or hiring of foreign personnel;
- relocation of assets;
- the choice of the form of registration in another country (there are more options than just registering a business from scratch, namely you can create a subsidiary and structure the future flows within the group of companies; you can register a non-profit representative office, if the initial stages are planned simply "advertising" themselves in another country, while it makes it possible not to pay taxes)
- re-signing contracts with counterparties (some of them may leave, not wanting to work with certain jurisdictions, this should also be taken into account).
When we help a business move to another country, we simultaneously solve the problems of the key individuals of this business - helping them with employment in another country, obtaining a residence permit, etc. As a result, the client receives a comprehensive solution that will help the business not only stay afloat but continue to thrive.
Opening a bank account for Ukrainian citizens
A separate stage in the company registration procedure is opening an account for the company. This procedure in the EU banks is slightly different from our usual procedure in Ukrainian banks. First of all, by the severity of the checks and quite a long procedure for opening an account.
When helping with business relocation or opening a company for doing business abroad we also take on the task of opening an account in a foreign bank.
Most often the procedure will require the personal presence of the director of the company to be interviewed by the bank staff.
A list of documents for business registration abroad will depend on the jurisdiction where you are planning to start a business and the rules of the bank you choose.
Looking to start a business abroad? Don't hesitate to contact us!